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Federal Research Funding and STEM Education

Author

Listed:
  • Emily Cook
  • Devaki Ghose
  • Ekaterina Khmelnitskaya

Abstract

This paper examines how federal science and engineering research funding—although intended to advance research—affects degree production and programs offered in science, technology, engineering, and mathematic (STEM). Using data from 1971–2016, the study implements a triple-difference design that exploits variation across colleges, time, and fields of study. The findings show that federal grants generate 27.4 percent of doctorates and 14.7 percent of undergraduate science, technology, engineering, and mathematics degrees, as well as 6.3 percent of doctoral programs and 3.7 percent of undergraduate programs in STEM annually across 200 U.S. research universities. The impacts are concentrated in biology and engineering, aligning with the priorities of major funders such as the Department of Health and Human Services, the National Science Foundation, and the Department of Defense. These findings suggest that research grants to universities may generate a "double dividend," simultaneously expanding the supply of skilled labor in targeted fields while also advancing scientific discovery.

Suggested Citation

  • Emily Cook & Devaki Ghose & Ekaterina Khmelnitskaya, 2026. "Federal Research Funding and STEM Education," CESifo Working Paper Series 12811, CESifo.
    • Handle: RePEc:ces:ceswps:_12811
    as

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    File URL: https://www.ifo.de/DocDL/cesifo1_wp12737_0.pdf
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    References listed on IDEAS

    as
    1. Tania Babina & Alex Xi He & Sabrina T Howell & Elisabeth Ruth Perlman & Joseph Staudt, 2023. "Cutting the Innovation Engine: How Federal Funding Shocks Affect University Patenting, Entrepreneurship, and Publications," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 138(2), pages 895-954.
    2. Daniel P. Gross & Bhaven N. Sampat, 2023. "America, Jump-Started: World War II R&D and the Takeoff of the US Innovation System," American Economic Review, American Economic Association, vol. 113(12), pages 3323-3356, December.
    3. Steven W. Hemelt & Kevin M. Stange & Fernando Furquim & Andrew Simon & John E. Sawyer, 2021. "Why Is Math Cheaper than English? Understanding Cost Differences in Higher Education," Journal of Labor Economics, University of Chicago Press, vol. 39(2), pages 397-435.
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    Cited by:

    1. Sheila Campbell & Jaeger Nelson & Eli Schrag & Heidi Williams & Caleb Wroblewski, 2026. "Estimating the Economic Effects of Federally Funded R&D," NBER Chapters, in: Entrepreneurship and Innovation Policy and the Economy, volume 6, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

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    JEL classification:

    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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